Splitit Payments Released March 2019 Quarterly Update

  • Apr 30, 2019 AEST
  • Team Kalkine
Splitit Payments Released March 2019 Quarterly Update

Splitit Payments limited (ASX: SPT) is an ASX listed information technology company providing payment method solution for the customers to split the cost into interest and fee-free monthly payments. The company serves a customer base including Internet Retailer’s top 500 merchants. It operates on a global scale and is headquartered in New York.

On 29th April 2019, the company released a quarterly report for the quarter ended 31st March 2019.

Performance Update

The numbers were generally impressive given seasonality with the March quarter typically being the slowest quarter for retail sales across the industry. Total active merchants were reported at 437 up by 15% from the previous quarter number of 380. The no. of unique shoppers were up by decent 36% to 160,000 from 118,000. The underlying merchant transactions and the merchant fees were reported at A$32.78 million and A$556,000 respectively. Both of the parameters were up from the previous quarter. The company has now processed over 160,000 purchases and AUD$128m of underlying merchant transactions to date.

Project Update

The company has been striving for growth and innovation. Significant developments have been made including launching the ‘Get Now, Pay Later’ solution and developing plugins. Work has also been commenced on developing a plugin to IBM WebSphere, e-commerce platforms and digital wallet.

Cashflow Update

The company used net cash of $2.54 million for operating activities. The cash received from customers stood at $322k which includes fees and net repayment of upfronted purchase amounts. $562k was spent on advertising and marketing, and $693k was spent on staff costs which is largely driven by key sales hires.

It received net cash of $8.81 million from financing activities for the quarter. The cash flow was driven by successful IPO which raised A$12 million and US$1.5 million from warrants that were exercised. Besdies, $19k was used in investing activities. The net cash and cash equivalents at the end of the year stood at $6.52 million.

Funding Update

The company has established funding with established partners in the US and UK and signed $25 million framework with a UK credit fund that includes some European countries. The company is in advanced discussion with multiple additional third-party funding facilities to fulfil the demand for funded plans by new and existing merchants. The company intends to reserve up to $3 million to fund funded plans for approved merchants. To mitigate the credit risk for the Self-funding Arrangement, it has purchased a credit insurance policy from Euler Hermes.

Corporate Update

Nathan Mairs has joined as V.P Sales and has brought a wealth of knowledge and experience after leading Klarna’s push into the US. Klarna is a multibillion-dollar Swedish payments company operating on a global scale

Andrew Pipolo has joined as Executive Lead APAC. He has also managed PayPal’s entry into both the Australian and Japanese markets.

Outlook

The demand for instalment payment solutions is increasing on a global scale, and the company seems well positioned to take advantage. The global sales pipeline is extensive with both direct and distribution channels expected to accelerate growth.

On 25th March 2019 the company released its annual report for FY18

On 13th March 2019, the company answered to the ASX’s query concerning a suspicion regarding price and volume manipulation.

Technical Outlook

The market capitalisation for the company is A$312.8 million. The 52 week high and low of the stock is A$2.0 and A$0.305 respectively. The stock closed the session at A$1.065, up by 25% as of 29th April 2019. Today, on 30 April, the stock is trading at A$1.065, down 8.19%. Since IPO the stock has delivered a return of 205.26%.


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